China Coal Price Index Development Report 2019

On April 10-11, 2019, China Coal Market Network (CCTD) and Shanghai Steel Union Electronic Commerce Co., Ltd. (Mysteel) co-sponsored the "China Coal Market Annual Conference and Global Maritime Coal Market Summit" held in Jinjiang Hotel, Hongqiao, Shanghai.

In the annual conference session, Dr. Feng Yu, President of China Coal Market Network, issued the "China Coal Price Index Development Report 2019". He elaborated on the development process, achievements, problems and prospects of the index.

Feng Yu said that since 2005, China Coal Industry Association and China Coal Transport and Marketing Association have set up a professional research team to start the work of compiling the coal price index, and then the coal trading center, information consulting company and other institutions have been involved in the work of compiling the index, and the number of coal price index compiling and issuing agencies has continued to increase. As of 2019, there are 21 influential index compilation and publishing agencies in the industry. Among them, coal trading center and information consulting enterprises are the main force in compiling and publishing coal price index.

By 2019, the domestic coal price index has basically met the market demand in terms of quantity and richness. All kinds of coal price indices are mutually corroborated and complementary, forming a national coal price index system with China's coal price index as the main body, regional, variety and market type price indices as supplements, and comprehensive index and sub-index linking up. According to Dr. Feng Yu, in 2018, the Price Department of the National Development and Reform Commission publicly released the "Price Index Behavior Management Measures (Draft for Opinions)." The standards for compiling and issuing price indexes have been significantly improved, and the technology of raising and discounting water has been widely used in the compilation process, and the market application has been gradually strengthened. In document No. 1843 of the Development and Reform Office, power coal price index around Bohai Sea, CCTD Qinhuangdao power coal price index and CECI coastal power coal purchase price index have been clearly listed as the reference index of floating price for medium and long term contracts of power coal, and the index has deeply participated in market pricing.

He thinks that compared with the limitations of futures pricing and negotiation pricing, using coal price index as pricing reference is the best choice at this stage. But there are also some problems in the current index market. Firstly, the low concentration of the market and the insufficient market recognition index result in the insufficient international competitiveness of the index and weaken the voice of coal pricing in China. Secondly, there is no entry threshold for index release, and all kinds of market participants do not need to obtain qualifications through application, auditing, filing, etc. Therefore, some defective indexes can still be issued continuously. Third, there is a lack of sharing and exchange mechanism. Many index compiling agencies develop blindly and compile indices at will. Homogeneous competition is more obvious. Dr. Feng Yu put forward three suggestions for this. On the one hand, he should promote the construction of national and global coal trading data platform, further improve the quality and efficiency of data collection of coal price index system, and rapidly promote the influence and voice of China's coal price index system in domestic and foreign markets; on the other hand, he hopes that the government, industry associations and enterprises will participate in it. Publish unified coal market trading rules, build scientific and unified price index compilation standards on this basis, optimize China's coal price index system; the most important thing is to strengthen the supervision of coal price index behavior.

Finally, he appealed that "the new era should have a new atmosphere and new actions". The index work should maintain close communication with the government, enterprises and other market participants, actively cooperate with the index compilation and publishing agencies, jointly build the brand cluster of China's coal price index system, enhance the credibility and international influence of the index system, and help the coal industry to achieve high quality.